Natasha has $1000 to open a checking account. She can maintain a monthly balance of $600. She also has a savings account at the
same bank. Her employer offers direct deposit and she plans to use online bill paying. She writes about eight checks per month. She currently uses the ATM machines at several different banks. Natasha sometimes overdraws her account. Natasha wants an account with the lowest fees. Which checking account would be best for Natasha?
Account A
Account B
Account C
Account D
Account A
Account B
Account C
Account D
2 answers:
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Answer:
The answer is option D
Explanation:
The bond can be issued at par, at a discount or at a premium depending on the coupon rate and the market interest. The price of the bond which pays semi annual coupon can be calculated using the formula of bond price. The formula to calculate the price of the bond is attached.
First we need to determine the semi annual coupon payment, periods and YTM.
Semi annual coupon payments = 2000000 * 0.1 * 6/12 = 100000
Semi annual periods = 5 * 2 = 10
Semi annual YTM = 0.08 * 6/12 = 0.04
Bond Price = 100000 * [(1 - (1+0.04)^-10) / 0.04] + 2000000 / (1+0.04)^10
Bond Price = $2162217.916
The price of the bond is thus $2162290 approx. The difference in answers is due to rounding off.
